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With the popularity of Amazon Prime increasing, striving small businesses are trying to compete by running paid membership programs, which create a new type of loyalty. So what is a loyalty program and how can running a “Prime-style” loyalty program benefit your business?

There are many types of loyalty programs on the market but in a traditional sense, the basis for a loyalty program is a customer earns points for spending and redeems a reward when a point target is reached. Therefore encouraging the customer to visit more regularly or increase their spending habits.

Historically these loyalty programs have been executed by paper or plastic cards due to ease of use. With the increasing use of technology and smartphones, today’s version of a loyalty program can include features like points being viewed in-app or marketing messages being sent via SMS. Typically these are the types of features you should find in a good quality digital loyalty platform:

Point balances sent in digital format (SMS, email or push)

Integrated into your businesses point-of-sale

The ability to send marketing messages via the platform

Auto-promotions for customer segments

Point-based loyalty points programs work well for cafes and quick service restaurants – venues where customers generally shop at a variety of places yet you still want to be at the top of their list of choices.

Digital Loyalty has evolved very quickly due to the advancements in the way customers consume digital content. Now we look at smartphones as a digital wallet or even our own shopping mall. Online shopping, Apple Pay, Amazon’s “one-click” purchase, and Amazon Prime have all driven us to enjoy fewer clicks, less hassle and basically doing less of anything.

So where does this leave small retailers? There’s still a place for independents as there are 22 million small businesses in the US, it’s just there is more pressure for business owners to add digital to their in-store experience. The combination of consumers going wallet-less along with the popularity of Amazon Prime is what has led businesses to use a “Prime-style” loyalty platform. In essence, a customer is charged a recurring fee and the business offers special rewards or benefits in return. Some features can include:

Setting up memberships and recurring payments directly from your point-of-sale

Tracking abilities for used rewards/benefits

Send promotions to VIP members to make them feel valued

Declined cards management

The icing on the cake is that all of this drives recurring revenues and leaves little up to chance when trying to strive for growth in a business. Membership programs work particularly well where there is a great deal of competition and the customer should be regularly purchasing your product/service.

The best vertical example using this type of software is car washes, for example charging $30/month for unlimited car washes. Membership programs can be used for unlimited rewards or a set amount of benefits within a billing period. Wine clubs, golf clubs, coffee shops, nail, tanning, hair and beauty salons, in particular, are also using membership platforms to run their Prime loyalty programs. Great membership examples in these verticals are:

$39.95/month for two premium bottles of wine a month

$119/month for 4 Deluxe facials per month and 15% off all products all of the time

$70/month for unlimited blow-outs or men’s shaving

$45/month for nail paint with shellac on toes and hands per month. As many touch-ups as required.

As far as small businesses go in surviving long-term, a digital loyalty strategy is a must – it’s just investing in an affordable product that can execute steady growth for the business and be so downright easy you would be lost without it.

So maybe these aren’t accurate statistics but it’s a fairly good assumption to say that every customer loves freebies. The definition of a “freebie” is something given or received without charge and we’re telling you that your business should give more of them away. These types of giveaways are important in a business’ marketing and sales strategy, but it needs to be executed effectively and with the right objective.

You might be surprised as to the insights behind giving away free goods. Logically the expectation is that customers will walk in, take their free stuff and run, but in fact the opposite occurs. Take 7-Eleven’s Free Slurpee Day for example; Slurpee sales were boosted by 38% when they offered free small Slurpees to every customer for one day of the year. Surprisingly, attendees of the Free Slurpee Day were sampling the free size and then upgrading to a larger size. Offering a freebie simulates a “try before you buy” selling technique but without any rules or obligation. This alternative method makes customers feel relaxed about making their own choices to purchase more.

Great times to offer freebies are when you are releasing a new product, when you need an aid in up-selling/cross-selling or simply looking for a new way to market your business. Right now you are probably looking at your income and wondering how much you can afford to give away for this kind of campaigns. In reality giving away free items is a great PR stunt for large companies and they can reach far more consumers than any SMB can. So how do you run a freebie campaign without losing out?

Here’s some alternatives:

Give away free smaller items with the purchase of larger items

Run a contest where customers must make a purchase to enter the competition

Implement a loyalty program, remembering to promote and celebrate your first day of launch in-store

Market a “freebie” hour, rather than an entire day

Effectively, you want either new customers coming in and becoming regulars or enticing current customers to come in and spend more with you by trying something different. Today’s consumers have a world of choice at their fingertips, so empower your customers to make the right decision by choosing you each time.

Happy staff = happy customers

Have you ever had the worst customer service ever? It ruins your day and you walk out of the store fuming. Now have you been served by an absolutely outstanding staff member and their customer service is next level? How amazing does it feel? Now that’s what helps create loyalty! Maybe it’s time to reflect on your businesses environment and start making some positive changes to motivate staff.

Reward employees for great performance

It’s one thing to congratulate the team as a whole but individually rewarding staff for hard work is a great tactic. It means those who go above and beyond feel appreciated and it makes underperforming staff realise they too can work just that little bit harder. A few great ways to do this is by:

Note: make sure to reward for various types of work, otherwise you may just end up rewarding the same staff members over and over again.

Incentivise using food to motivate staff

Well you’ve heard that food is the way to a mans heart but it’s also the way to a staff members heart. Your employees work hard and there’s nothing better than shouting your team lunch. Without spending too much either, you will find a full stomach leads to better productivity and happiness. Try and use mood boosting food to motivate staff such as healthy burgers incorporating eggs and avocado or why not even try keeping a fruit bowl in the lunch room. You’ll be surprised how much this can change your staff members happiness.

Utilise wall space

Ok maybe motivational quotes are a bit old school but who’s to say you can’t try the following:

Bulletin boards: This is a fantastic way to communicate outstanding work, pictures from staff events, posting about birthdays or if there is nothing to communicate put up a joke. Communication is the key to running a business and if the staff can take part in it and get the creative, the more they will be willing to exchange ideas and converse.

Business news: Sometimes it’s hard to get staff excited about business news. You as the business owner find everything exciting when it comes to advances in the business, so why not let them choose when to get excited by it. Put up a visual graph to show growth or success so employees don’t have to read, they simply walk in and see straight away how well the business is doing. This will make them feel like they are part of something truly special and that you are all working together to achieve greatness.

Fun pictures: You might get a few eyeball rolls if you start hanging up motivational quotes everywhere but putting up fun pictures with bright colours can enhance ones mood. The best colours for happiness are green and yellow, so get hanging and get those staff happy!

We’ve all had it happen to us, your business is going well with a steady flow of customers and then boom! A store opens up down the road who offers the same product or service as you but with way cheaper prices. It’s unfair isn’t it? You work so hard, and we all know that your business and staff are much better, but those pesky customers have been swayed by lower prices. If you’re lucky your customers will have a bad experience with your competitor and come running back to you, but you’re taking a big risk. What if they don’t come back to you, then what? What if there was a way to stop them from ever leaving you?

This is where the magic comes in. Consumer psychology can sometimes be a mystery to us. Ok sure, we all know that consumers are swayed a lot of the time by cheaper prices, but what if it was much more than that. Customers are actually heavily focused on the whole package, not just the price. Did you know 44.3% of consumers in the UK admitted that if a retailer annoyed them, they would not hesitate in using another retailer (Webloyalty, 2016). That’s a pretty big stat! What if a staff member accidentally serves your customer the wrong coffee? Poof! and your customer could be gone down off the road, never to return. Let’s think about it though, is that really the customer you want as a business owner? Business owners want customers that love them and vice versa. But how do you make a customer feel loved, this is the age old question. Sure you can go out of your way to remember every customer’s name and their favourite product but that’s a lot of effort (and a very good memory). What about rewarding them for being a regular?

Customer’s come to see you sometimes every day if you’re lucky enough but what do they get in return? The same latte in the same cup, served by the same person with the same smile. 55.4% of consumers in the UK admitted that they often get bored of using the same stores and brands (Webloyalty, 2016). Well what if once in awhile the customer gets a free muffin with their coffee, or a 10% discount on their next purchase, that might make a difference. Loyalty cards have been around for a long time, to make this possible and to make customers feel loved. Are cards the right solution though? They always end up getting lost somehow and then the customer just ends up accumulating a stack of cards that eventually ends up in the bin because they don’t fit in the customer’s wallet. Guess what, loyalty programs are now on the rise in a digital format. “Yippee!!” I hear you say, those faithful customers are now going to love you even more. Squash those competitors and start benefitting from moving to digital. You’ll wish you had changed sooner.